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FG Did Not Takeover Abuja Electricity Disco

The Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprises (BPE) have said that the action   to appoint   an interim  team  to manage  Abuja Electricity Distribution Company (AEDC)  was  not done  on the directive   from the Federal  Government, but on the basis of legal  processes  arising  from the failure   of the core investor  in the company to meet its obligations   to a lender.

NERC and BPE in a joint statement on Wednesday, signed by Sanusi Garba and Alex Okoh, Chairman and Director General respectively, stated that there has been an ongoing dispute amongst competing factions of AEDC’s majority shareholder/core investor i.e. KANN Utility Company Limited (KANN); and the dispute eventually spilled over with the lender that provided the acquisition loan to KANN for the acquisition of  majority shares  during the  privatisation exercise  in  2013,  over KANN’s inability to service its debt to the bank.

he United Bank for Africa (UBA) had acted as Mandated Lead Arranger, underwriting the entire facility of $122million, about N20 billion then for Kann Utilities acquisition of the Abuja Electricity Distribution Company.

“During the course of the intractable crisis, AEDC not only struggled to meet its obligations to the market under the terms and conditions of its licence but was also unable to meet its obligations to key stakeholders in the organisation including staff culminating in the industrial action by members of the Nigerian Union of Electricity Employees (NUEE). Eventually, this resulted in a total service disruption on 6th December 2021 for over 14 hours in AEDC’s network area.  The provision of electricity supply in AEDC’s  network area was only restored after the intervention of the Minister of Power, NERC and BPE following an agreement with the union on the terms for the suspension of the industrial action on 6th December 2021.

“The general public should note that arising from KANN’s inability to service its acquisition loan and the ensuing dispute over the servicing of the loan from U BA Pie, the lender exercised its rights by appointing a Receiver/Manager over KANN. Stakeholders including NERC,Central Bank of Nigeria (CBN)  and BPE had on several times worked to broker an amicable resolution between the contending parties. The protracted resolution of the dispute exacerbated the state of affairs at AEDC  resulting  in an industrial  action  and a total blackout  in the service  area for over 14 hours.

“It then  became  apparent  that decisive  steps were  required  to address  the matter and BPE agreed with the lender’s  request to exercise its powers as Receiver/Manager    over  KANN  by exercising   its powers  over  the  60%  equity  in AEDC as a means  to recovering  the acquisition  loan granted  by the Bank.

“The action   to appoint   an interim team to manage AEDC was not done on the basis of a directive   from the Federal Government as being falsely reported in the press but on the basis of legal processes arising from the failure   of the core investor in AEDC to meet its obligations   to a lender.

“The   Receiver/Manager    has agreed   to the   appointment of an interim management team in conjunction with  BPE  as  part  of  measures designed to address   business   failure   events   and  ensure  continuity of  service  to  end-use customers  in  the service  area.

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